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Life Health > Life Insurance

New York Requires Use of Master Death File

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New York state insurance regulators are ordering life insurers to use the Social Security Death Master File to locate insureds who may have died and report on the effectiveness of the search.

“Essentially, the insurers are being asked to report on the effectiveness of their current procedures by using a reliable available list of deaths to identify the claims that should have been but were not paid,” according to officials at the New York State Insurance Department.

The New York department is sending the query in the form of a “308 letter” to all 172 life insurers and fraternal benefit societies licensed to do business in New York state.

Affected insurers and benefit societies must try to determine where benefits payments are due, locate beneficiaries, make payments, and report on the initial results by Sept. 30. The search program required by the query will apply to annuity contract holders and retained asset account holders as well as to life policy insureds, and it will continue for six months, officials say.

A final report will be due March 31, 2012.

Insurers and benefit societies are legally required to respond to the 308 letter, and the reports are subject to audit, officials say.

The New York department is planning to develop an amendment to the state unfair claims practices regulations to require life insurers to perform regular Death Master File checks. The amendment also will require insurers to collect more of the information needed to track policyholders, account holders and beneficiaries, officials say.

The New York department has issued the query in response to reports that some life insurers have been using the Death Master File to try to locate annuity benefits recipients who have died but have not been using the database to try to find life insurance policy insureds who may have died.

Life insurers have argued that they have been less active in using the database to find life policy insureds who have died because they tend to have less information about life insurance policy insureds, and because the relatives and other potential beneficiaries of life policy insureds have a financial incentive to bring deaths to the attention of life insurance companies.

In related news, the Wall Street Journal is reporting that the New York state attorney general’s office has sent subpoenas regarding the insured search issue to a number of life insurers. Representatives from the office were not immediately available to comment on the reports.


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